SOLOMON ISLANDS

COUNTRY OVERVIEW

LOCATION AND SIZE.

The Solomon Islands is an archipelago (a group of islands) in the South
Pacific Ocean, about 485 kilometers (300 miles) east of Papua New
Guinea, and about 1,900 kilometers (1,200 miles) northeast of Australia.
Solomon Islands has a land area of 27,540 square kilometers (10,633
square miles) and a total coastline of 5,313 kilometers (3,301 miles).
The land area of Solomon Islands is slightly less than that of the state
of Maryland. Guadalcanal is the largest island, about 5,300 square
kilometers (2,047 square miles). Other islands include Makira, San
Cristobal, Vella Lavella Ren-nell, and Santa Cruz. Honiara, the capital,
is located on the north coast of the island of Guadalcanal.

POPULATION.

The population of Solomon Islands was estimated to be 466,194 in July
2000, based on a census taken in November 1999, the first since 1986.
Over that period, the population increased by 43 percent, corresponding
to an average annual increase of 2.8 percent. This was a substantial
decline from the average rate of 3.5 percent per year between 1976 and
1986, but the current rate is still high by world standards. The birth
rate was estimated at 40.9 per 1,000 population in 2000, one of the
highest in the Pacific, and the death rate was 6.8 per 1,000 population.
The projected population by the year 2010 is 620,500.

The great majority (93 percent) of the population is of Melanesian
ethnicity, with about 70 different language groups, mostly located on
the larger islands of the archipelago. A minority (4 percent) is of
Polynesian descent comprising about 8 different languages; these people
mainly originate on the small outlying islands, although many are now
settled elsewhere. An even smaller minority (about 1.5 percent) is of
Micronesian ethnicity, mainly descendants of those resettled from the
Gilbert Islands (now Kiribati) during the colonial period. The rest of
the population is mainly of European or Chinese ethnicity. Of the major
countries of the Pacific, Solomon Islands is the least urbanized, with
only 13 percent living in urban areas. The only significant urban center
is the capital Honiara, with about 50,000 people; in recent years
Honiara has been growing about 35 percent faster than the rest of the
country.

Despite high birth rates, Solomon Islands governments have not
aggressively promoted family planning. For several years, there has been
a low-key population planning policy, which promotes smaller family
sizes and infant and maternal well-being. According to the 2000 census,
birth rates have declined considerably, perhaps due to improvements in
infant health and greater availability of contraceptives.

AGRICULTURE

AGRICULTURE.

Through much of the 20th century, under British colonial rule, Solomon
Islands represented a classic example of a plantation economy, with
coconut production being the primary activity of both village
smallholders
(individual farmers) and large-scale expatriate (foreign) plantation
owners. For village producers, the production of copra (dried flesh of
coconuts) is still an important source of cash, and several large
coconut plantations are still operating. As a source of export income,
coconut products have steadily declined since the 1960s. During the
1990s, a number of coconut oil presses were installed in various parts
of the country, and this has increased the value of this product.

For many years, government and international aid donors have sponsored
initiatives to diversify the agricultural base of both smallholder and
large-scale farmers by promoting the production of cocoa as a new crop.
In 1998, cocoa comprised about 5 percent of export income. Also
moderately successful has been the production of chilies, mostly at the
village level.

In the late 1970s, large-scale rice production was established by an
American company on the Guadalcanal Plains, leading to a small export
trade. The industry collapsed in the next decade due to flagging
domestic demand and the destruction of much of the crop in 1986 by
Cyclone Namu. Production resumed in the mid-1990s on large plantations
on Guadalcanal and on a smaller scale in many villages. The UN Food and
Agricultural Organization estimated that 4,500 metric tons of rice were
produced in 2000, up from 1,300 metric tons in 1998.

FORESTRY.

Most timber exports have been of whole logs, with only about 10 percent
of total production in the 1990s being milled within the country.
Logging began during the British colonial period and escalated
considerably after independence in 1978. It is estimated that accessible
timber resources may be exhausted by about 2010 if present levels of
logging continue. The rate of exploitation was a major political issue
during the 1990s and into the 21st century.

FISHING.

Fishing is an important activity at 3 different levels: subsistence
production (production that only meets the immediate needs of the
producer), small-scale cash fishing, and the large-scale offshore
fishing industry. Small-scale cash fishing is most successful near urban
markets, especially Honiara. Since the early 1980s, 31 fishery centers
providing refrigeration and marketing services have been established
throughout the country, although many of these have since failed. In the
late 1990s, some centers were being renovated amidst attempts to
facilitate the marketing of fish to Honiara and to Australia.

There were 2 major local fishing companies in 1999: Solomon Taiyo Ltd.
(STL) and National Fisheries Development (NFD). STL has a large cannery
at Noro in Western Province which produced nearly a million cases of
canned tuna in 1999, about one-quarter of which was sold domestically.
While domestic prices for fish remained high during the year, the world
price of tuna plummeted, causing NFD to cease operations late in the
year. STL closed during the period of ethnic tension, but is expected to
open again.

INDUSTRY

MINING.

Small-scale mining during the 20th century consisted mainly of
gold-panning operations on Guadal-canal; the Gold Ridge mine in the
central part of the island did not begin production until 1998.
Developed by Ross Mining, this operation was expected to produce gold
for about 10 years. The mine was closed down in June 2000 as ethnic
tensions reached a peak. As of early 2001, the mine had not reopened,
although negotiations were underway with landowners and the government
about issues of compensation and security.

MANUFACTURING.

Except for the production of traditional handicrafts, manufacturing has
never been a major industry in Solomon Islands. In the late 1990s it
contributed about 5 percent of the country's GDP. The most
important manufacturing enterprises cater to the local market in such
sectors as food processing, beer, furniture, construction materials, and
construction of outboard canoes. Traditional handicrafts such as
woodcarvings, weavings, and shell ornaments are sold to tourists or
exported on a small scale.

SERVICES

TOURISM.

Despite its beautiful beaches and calm lagoons, Solomon Islands has
always had a relatively small tourist industry. About 12,000 people
visited the islands each year, with relatively little increase until
1997-98. Although official figures are not available, the numbers of
visitors dramatically fell in 1999 and 2000 as a result of ethnic
tensions and the interruption of air services into the country.

Guadalcanal and the nearby islands were major battlegrounds during World
War II, and in the decades after the war most tourists were returning
veterans or their families, both American and Japanese. Following the
end of the war, the landscape was strewn with downed airplanes, tanks,
and other war material, and the beaches of Guadalcanal and some of the
other islands were littered with landing craft. Much of this material
has since been exported as scrap, but even in 2001 there are remnants.
Both the Japanese and the Americans have constructed hilltop monuments
for the many thousands of troops killed during the war. More recently
the country has become a center for scuba diving and snorkeling; along
with spectacular coral reefs, there are many sunken warships still
intact for divers to explore. Many tourists are attracted by the great
cultural diversity of the country and its traditional villages.

Tourist infrastructure is limited, with only a few international
standard hotels, mostly in Honiara, although there are guesthouses in
most areas. Since the mid-1990s, efforts have been made to develop
ecotourism
(nature holidays), mostly village-based but in many cases supported
through international aid programs. Unlike neighboring countries such as
Papua New Guinea, Vanuatu, and Fiji, the Solomon Islands has no flight
and accommodation packages available to international travelers.

FINANCIAL SERVICES.

The financial services sector is small and mainly serves the local
market. International banks such as Westpac and ANZ are located in
Honiara and 2 provincial centers. The National Bank of Solomon Islands
(a joint venture between Bank of Hawaii and the local National Provident
Fund) is the only commercial bank with branches in smaller towns. The
Central Bank of Solomon Islands (CBSI) regulates money supply and is
responsible for general economic monitoring, and the Development Bank of
Solomon Islands (DBSI) offers small-scale lending for development
projects.

RETAIL.

The
retail
sector is not well developed. Most retail operations are in Honiara and
other towns, but the range of goods is limited. Villages are served by
small locally-run shops selling basics such as soap, kerosene, rice,
tea, sugar, biscuits, and fishhooks, or by copra trading boats that also
serve as retail outlets.